When a bond is retired, a gain is recorded when the cash paid is less than the amortized cost.

Name: When a bond is retired, a gain is recorded when the cash paid is less than the amortized cost.
Brand: Quizplus
Rating: 4.8 (35 reviews)

Question

Quizplus · Accepted Answer

When a bond is retired and the cash paid to retire the bond is less than its amortized cost, the difference is recorded as a gain because the company has paid less than the amount it owed, effectively saving money.

When a Bond Is Retired, a Gain Is Recorded When